South African Rand Hits 1-month High Versus Greenback Amid South Africa Retains Key Policy Rate

Extending previous session uptrend, the South African rand advanced further against the US dollar in New York morning trading on Thursday. At about 10:20 am ET, the rand climbed to 1.2960 versus the greenback, which may be compared to yesterday's closing value of 1.5425. This set a 1-month high for the South African currency. AS of now, the pair is worth 7.4374. The next upside target level for the South African unit is seen at 7.4241.

South Africa's central bank maintained the benchmark repo rate at 6.5% per annum for the second straight rate-setting session, citing favorable inflation outlook and continued recovery of the domestic economy.

The decision was in line with the economists' expectations. South African Reserve Bank Governor Gill Marcus observed that the risks to the inflation outlook are evenly balanced and views the current monetary policy stance as appropriate.

However, she warned that although the concerns regarding the sovereign debt crisis in Europe have found some respite, significant risks persisted. Furthermore, in some countries, growth is losing the momentum witnessed in the first quarter.

The central bank also pointed to signs of recovery in domestic household consumption expenditure. In the first quarter, consumption expenditure grew at a higher than expected annualized rate of 5.7%.